Mims v. Mut. Ben. Health & Accident Ass'n

• Decision Date: 24 May 1943
• Docket Number: Gen. No. 42440.
• Citation: 319 Ill.App. 239,48 N.E.2d 796
• Parties: MIMS v. MUTUAL BEN. HEALTH & ACCIDENT ASS'N.
• Court: United States Appellate Court of Illinois

319 Ill.App. 239

48 N.E.2d 796

MIMS

v.MUTUAL BEN. HEALTH & ACCIDENT ASS'N.

Gen. No. 42440.

Appellate Court of Illinois, First District, First Division.

May 10, 1943.

Rehearing Denied May 24, 1943.

Appeal from Cook County Court; Albert E. Isley, Judge.

Action by Mary Mims against Mutual Benefit Health & Accident Association on a life and accident policy. Verdict and judgment for plaintiff, and defendant appeals.

Affirmed. Ross, Berchem & Schwantes, of Chicago, for appellant.

Meyer A. Ginsburg, of Chicago, for appellee.

O'CONNOR, Justice.

Plaintiff, the beneficiary of a life and accident policy issued by defendant, brought suit to recover $1,250, the amount of the policy, for the accidental death of her husband, Doc Mims. There was a jury trial, a verdict and judgment in plaintiff's favor for $1,250 and defendant appeals.

The record discloses that November 2, 1938, defendant issued its health and accident policy to Doc Mims and on that day he paid $10 in advance as a first payment and thereafter agreed to pay $7 quarterly in advance beginning March 1, 1939. The last quarterly premium of $7 was due April 1, 1941 and paid April 7, 1941. This premium paid for the months of April, May and June so that it is agreed the policy was in force and effect on July 1, 1941. The insured, Doc Mims, was accidentally killed July 10, 1941, and the defense interposed was that the policy was not in effect at the time of his death.

The Quarterly Premiums became due: The Quarterly Premiums were Paid:

+------------------------------------+
                ¦March 1, 1939  ¦March 13, 1939      ¦
                +---------------+--------------------¦
                ¦July 1, 1939   ¦Receipt not produced¦
                +---------------+--------------------¦
                ¦October 1, 1939¦October 1, 1939     ¦
                +---------------+--------------------¦
                ¦January 1, 1940¦January 31, 1940    ¦
                +---------------+--------------------¦
                ¦April 1, 1940  ¦April 15, 1940      ¦
                +---------------+--------------------¦
                ¦July 1, 1940   ¦July 1, 1940        ¦
                +---------------+--------------------¦
                ¦October 1, 1940¦October 1, 1940     ¦
                +---------------+--------------------¦
                ¦January 1, 1941¦January 13, 1941    ¦
                +---------------+--------------------¦
                ¦April 1, 1941  ¦April 7, 1941.      ¦
                +------------------------------------+
                

The theory of plaintiff was that the conduct of defendant in accepting a number of the quarterly premiums after they were due, one as late as 30 days after it became due, estopped the defendant company from claiming that the policy was not in effect on July 10, 1941, the day the insured was accidentally killed. Defendant's theory as above mentioned is that the policy lapsed July 1, 1941, because the $7 premium which was required by the policy for the months of July, August and September, was not paid on or before July 1, 1941. In support of this, counsel for defendant say that one of the standard provisions of the policy, as required by the statute, (Ill.Rev.Stat.1941, chap. 73, par. 969, (357, sub. par. (A) 3,) provides: “If default be made in the payment of the agreed premium for this policy, the subsequent acceptance of a premium by the Association or by any of its duly authorized agents shall reinstate the policy, but only to cover accidental injury thereafter sustained.” And that when each quarterly premium of $7 was made, defendant sent the insured an official receipt in which the due date of the premium was given and the date the payment was received. In the first of these printed receipts was the following: “Payment of this premium receipted for, if made on or before the date to which premiums have already been paid, keeps your policy in continuous effect, and if made after that date, reinstates the policy on date of this receipt, as provided in policy, until 12 o'clock noon, standard time, June 1, 1939, at which time another premium will be due.” Similar receipts were given when the quarterly premiums of $7 were made except the dates varied when the premiums were due, the date the payment would carry the policy and the time when the next premium was due.

In support of defendant's contention that the policy was not in force after July 1, 1941, counsel say that when the premium was not paid when due, the liability under the policy ceased on the due date and when payment was afterward made, the policy was reinstated on the date of the payment. Counsel cite, discuss and analyze a number of authorities from this State and from other jurisdictions. The effect of this argument would be that the policy was not in effect continuously from the date it was issued, November 2, 1938, but that the policy had lapsed from the respective dates when the premiums became due until the payments were made. In this connection let us examine the facts. The first premium was due March 1, 1939. It was not paid until March 13, 1939, so that for 12 days, under defendant's theory, there would be no coverage. Another premium was due January 1, 1940. It was not paid until January 31, 1940, a period of 30 days not covered; April 1, 1940, another premium was due but it was not paid until April 15--14 days of non-coverage. January 1, 1941, a quarterly premium of $7 was due but was not paid until January 13, a period of 12 days from which there would be no insurance, and the last premium was due April 1, 1941, but was paid April 7, a period of no insurance of at least 5 days. But a consideration of the evidence discloses that the insured was charged for the entire period of time. We think it obvious that defendant ought not to be permitted to contend that when the payments were made after they were due, there was no coverage from the due date until payment, and at the same time, charge the insured for these periods of time.

In Rashinski v. Travelers Casualty Insurance Company, 312 Ill.App. 260, 38 N.E.2d 362, (abst.) we said: “It is well settled by many cases in this state that where an insurance company induces the insured to believe that payment of the premium may be made after the due date, a forfeiture is barred where the payment is made before the last day of the extended period. Baxter v. Metropolitan Life Ins. Co., 318 Ill. 369 [149 N.E. 243];Stevenson v. Prudential Ins. Co., 308 Ill.App. 401, 408 [32 N.E.2d 175];Hooker v. Farmers Mut. Reinsurance Co., 304 Ill.App. 230 [26 N.E.2d 146];Chicago Life Ins. Co. v. Warner, 80 Ill. 410. In the Stevenson case, supra, the beneficiary was notified that unless the premium was paid by a certain date the policy would be forfeited, but the company declared a forfeiture before that date; we held that the beneficiary ‘had no way of knowing that the policy would be forfeited before ...